This is the third Mother's Day that my mom has been within easy driving distance. For most of my adult life, and all of my married days, that hasn't been the case.
I am not, however, spending this day with her.
Since her relocation nearer me, we've worked out a schedule where I pop in every two weeks or so.
In synchronizing our calendars for the first half of 2013, we had to juggle her grocery shopping needs, Mother's Day, her upcoming birthday and the Senior Citizens' Center dance schedule.
Mother's Day lost.
But Mum and I don't need a special day.
We make the most of those regularly-scheduled Saturdays or Sundays that I spend at her place.
Reversing caregiver roles: And I am very thankful that she's still so independent. For many adult children in my demographic, parental roles have reversed.
They have in our case, too, to a degree. But we are not yet at the
point where Mum needs so much help that I can claim her as an official dependent on my tax
return.
To get some tax help in taking care of an aging parent, you must meet some specific requirements.
My tax tip on this topic goes into the details, but this Mother's Day I want to highlight two key considerations, income and support.
Calculating parental income: To claim a parent as a dependent, his or her gross annual income must be less than the personal exemption amount. For the 2013 tax year, that's $3,900.
In most cases, your parent's Social Security benefits don't count.
But if mom or dad have other
income — earnings from a part-time job, individual retirement account distributions, pension payouts, rental proceeds, or other investment income, such as interest, dividends or capital gains from asset sales — those amounts must be included in the tally.
When that total comes to more than the annual limit, then quit calculating. You can't claim your mom or dad as a dependent.
Adding up support costs: If, however, a parent's earnings don't meet the income cutoff, you then must look at how much you contribute to mom's or dad's day-to-day expenses.
The bottom line is that you must pay for more than half
of your parent's daily living costs, which include such things as food, housing, clothing, medical care and
transportation.
But figuring just how much support you provide mom or dad can be tricky.
Say, for example, your mom relies totally on Social Security, which comes to $14,000 a year. That's her only income and it doesn't count in the income test. But it does count when calculating the support issue.
She pays her rent — let's say that's $7,000 a year — with her Social Security. She also picks pick up the $200 a month for her Medigap insurance. And she pays for all her groceries, which in this example we'll say are $150 a month. That comes to $11,200.
That leaves her around $230 a month to pay for other needs and wants. When things are a bit tight, you help cover those utility bills and sundry other expenses as she needs — and allows. We all know how stubborn our folks can be about accepting help from their kids!
Unless she has some major unexpected costs — and at your mom's age, that usually means something medical, which you really don't want to happen regardless of potential tax breaks for you — you're not going to meet the support test's threshold.
Still, if you are pitching in any amounts toward your mom's expenses, keep track of them as you pay. If things change during the year and you find you are paying more, you'll have the amounts on hand for a quick tally to see if you've reached the more-than-half amount.
Other resources: On this day dedicated to moms, here's hoping that you don't have to think about taking care of her for a long, long time.
When that time does arrive, Aging Care has some nontax tips. Also check to see if your area has a group like Elder Options of Texas.
Until then, though, enjoy today and every other moment you have together.
Photo credit: williamcho via photopin cc
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Agatha
Thanks for this simple straight forward breakdown. I know I will have to consider all of this when my parents retire in about 10 years…and it’s helpful to start at least some mental preparation now.